WHILE BRAD SHAW is now CEO of a much different Shaw Communications than the one his father JR and brother Jim built and ran, one aspect hasn’t changed.
No handlers.
As a journalist, I’ve interviewed many CEOs and other senior executives at large corporations. Most of them come to interviews with one or two others in tow who keep tabs on the interview or have other tasks. Nothing wrong with that, but it’s just not the way the Shaws do things. Never been their style. When a reporter calls the company with a question, invariably the president or CEO is the one calling back.
For many companies, and especially one the size of Shaw Communications, that’s pretty rare. But for a reporter, it’s always better to get an answer from the person in charge.
Our hour-long chat with new CEO Brad Shaw on Monday reflected that ethos. It was just he and I in a Toronto hotel lobby and it’s very likely none passing by knew the fellow in the jeans and stylish shirt (no tie, no jacket) was the CEO of the largest media and distribution company in the country. Then the next day, after giving his talk at the Broadcast Executives Society luncheon, Shaw waited with the rest of us at the coat check before heading off.
For some CEOs, standing on line like that, too, is rare.
The Shaws and their executive team have often said they like to run a lean organization so they are as close to the customer as possible. While that hasn’t changed with the new Shaw (pictured) at the helm – a 46-year-old father of four and minor hockey coach – the company and the media marketplace in which it operates is a far more complex beast than anything Brad’s father and brother had to deal with.
What follows is an edited transcript of our Monday interview.
Greg O’Brien: Let’s start with your history at Shaw. You’ve been with the company quite some time. Can you take me through the run of jobs that you’ve had, and perhaps some thoughts on your favorite job, looking back?
Brad Shaw: I started as a customer service rep (in 1986) for three years in Edmonton, answering phones, so I got a real appreciation of the relationship with customers from small beginnings. Then from there I moved into marketing, moved into sales, right in the Edmonton system, and then about five years later moved to Hinton as manager.
GOB: Hinton (Alta.). Very small.
BS: 2,000 subs. My dad said “listen, there’s only so much right, so much wrong you can do here. You can only grow so much. You can only spend so much.” (Iaughter)
GOB: How many employees did the Hinton system have?
BS: Five very loyal employees… Then from there I moved to Vancouver Island and continued in management roles and expanded. And eventually got all of Vancouver Island – about 160,000 subscribers in ’94 when we did the Rogers swap for Victoria. From there was the great opportunity to move to Calgary in ’97 to be VP operations in cable. I did that for five years, and then ran Star Choice (now Shaw Direct) for a few years and then moved to senior VP of operations in cable, then SCI and then executive VP in there and finally into this role.
I’ve so enjoyed it. It’s been such a run. There’s so much in front of us changing and so many challenges, but I just love the challenges, love the opportunity. I’m pretty humbled to even be in this position, to follow two great gentlemen that I just keep focused on what we need to do and keep watching with the customer and where we’re going and what we need to do.
But it is humbling when you look at the CEO job, and you just want to follow in those footsteps in a way that will differentiate yourself a bit.
GOB: Did you always know you wanted to be CEO?
BS: No. I just wanted to work when I first got a job, but enjoyed it so much I never really thought about it. I just loved the family business, loved what we were able to achieve, loved the opportunities. So more recently as it became more apparent that there was an opportunity, I thought “was I really ready?” And I wasn’t sure I’d ever be ready.
But naturally it just came and I thought, “Wow. I certainly feel more comfortable. I certainly understand the business.” And I’m a guy that – as I tell staff – I know a few things, but (they) know just as much as I do about the business. We want to innovate. We want to be creative.
We have 13,000 employees, and I always say to the team it’s about how we drive the business, not me. I’m not top-down, it’s about how we move the business from the ground-up. What do we need to change? And we’re committed to that, and so it’s resonating in the business as we’re seeing a lot of people really drive change.
GOB: Do you look back at any sort of favorite role that you had? For example, when I look back at my own career, one of the most fun times I ever had when I was working at The Tilbury Times as the do-everything reporter. I did sports, layout, photography, agriculture writing. A lot of fun. Worked 70 hours a week. Very little pay, but learned a lot. Do you look back at any of the roles you had that might have been a favorite one that maybe taught you a lot?
BS: I think being regional manager in Vancouver Island, having Nanaimo, Duncan, and then eventually getting Victoria, just that opportunity to integrate that, bring those employees in. And Vancouver Island is a great spot to live, but the business was pretty exciting back then as the internet was starting to take off, we were getting prepared for phone. It was small, hands-on. You’re still in the system, still working with people, and you’re still out there. You’re close to the customer. Not that we’re not now, but you’re just that much closer because you’re the guy on the street.
GOB: What have you learned from your dad over the years? He’s still pretty involved, from what I understand.
BS: Yes.
GOB: He’s still in the office and it’s his name – and your name, obviously – on the buildings. But what’d you learn from your dad through the years?
BS: I’ve been giving that a little thought. I don’t know if you’ve ever heard the motor home story.
GOB: No.
BS: We used to travel, and Dad was big on motor homes. So in the summer, we’d all pack up, jam into the biggest motor home he could find at that time and we’d spend time either going skiing or camping or something. But what we would do is sure as heck go around to all the little cable companies. He would go in, have coffee, spend time. We would go crazy asking, “Let’s get going!” But he was spending that time to build the relationships… because when they go to sell, who do they phone? Well, they’d phone JR because he spent the time to meet with them, listen to them, chat.
This was when we just had maybe Kelowna and Edmonton and if it was Vernon and George Galbraith or Casey Hanemeyer in Cranbrook – for all those things , relationships were key. Relationships are fundamentally important. It’s about relationships with the customers, shareholders.
(JR) is very humble, and so I really look at that as quite an attribute. And for everything he’s been able to accomplish and still be as grounded as he is, down to earth, I look at those attributes and say, “Wow, I hope I can still be like that,” and take away how important relationships are, treating people equal, no matter if it’s the janitor or the chairman of the board. That’s one thing JR has that’s so special. He can connect to the person sweeping, or to the guy running the biggest company in the world. He just has that way about him, and it’s unique.
GOB: What did you learn from your brother Jim?
BS: Oh, geez. Lots. He’s an incredible thinker. Incredible knowing where the industry’s going, what we need to do. Knowing how to link that with the customer, what the customer wants. And his fortitude. I don’t know how many CEOs have been 12 years in that role – and the contributions he made to our company were incredible. So I think from him, it’s about learning a way to cut to the chase. Get rid of stuff all around and find the point on the map that you want to get to.
GOB: Jim is definitely good at cutting to the chase.
BS: Yeah, (laughter) he’s very good at that. He’s real, and I like it because he hits you were you need to be hit. He’s not one to sit there and spend 20 minutes telling you what you need to know. He’ll tell you to move on. He says, “Listen. Life’s like that. You’re going to take shots. You’re going to make mistakes. But call it, address it, and move on.”
GOB: And you get those hits from the other direction, too. You hear it from customers when something goes wrong. They’re not shy to tell you or anyone at Shaw what has gone wrong with their services.
BS: Oh, absolutely. We always hear it because we’re constantly trying to improve how we’re offering service and everything we do. And we make mistakes. It’s just eliminating them and getting yourself into position where few and far between.
GOB: Now JR had has his style, and Jim has his style. Quite different, you could say. What do you think your style is, and how are you going to brand that onto the company? How are you different from or similar to your dad and your brother?
BS: I guess I would be more similar to JR in relationships and building them. One thing I’ve spent a lot of time is building the relationships between our senior management team, 35 of our top VPs. I want the team to be real with each other… because people are going to screw up. Things are going to be tough. Stuff might be bothering you at home, so it’s how we deal through that at work. It’s trying to take the mask off and be real with each other, and it’s just made the relationships with the senior management team stronger than I ever could have imagined. We’re not all the best of friends, but we certainly understand what’s going on in the other person’s life and what we’re dealing with, and you give an appreciation of what they’re having to go through.
And as I talked about the 13,000 staff, we want to do the same thing with them and (emphasize) powerful relationships, an engaged workforce, unstoppable, productive, call the ball… because this is going to come down to people.
In competition, everyone’s going to have the technology and success is going to come from the wherewithal of your staff and how willing and how far they want to go for the customer. How well do they want to fight? How big is their heart? Will they spend another 30 minutes there? Will they go the extra mile to do this? I think the customer is thinking, “Well, who is this company? Do I want a relationship there? Is there something more than just sending the money? ” So it’s a little broader.
GOB: Now Shaw, moving forward, it’s a much bigger, different organization than the one your father and your brother ran. You’ve got Shaw Media now. Soon you’ll have wireless. Thinking about that and thinking about maintaining all of those customer relationships etc., what keeps you up at night?
BS: It’s continuing to do a good job. It’s having customers wanting to do business with Shaw. We have to have the products. We have to have the service. I think we have to be prepared to follow the customer, and everyone’s talking about, “I don’t know what the customer’s going to do. What about multi-platform, where are they going to go and what do we do? ” And so for us it’s having that great experience on linear television in your home and expanding that around, having that go on any product and doing anything.
But for me, it’s keeping it simple. We know where we want to go. When I look at the assets that Shaw has, it’s incredible when we look at the Global Network and the 19 specialties and the distribution we have. I know competition’s heating up, and listen, it’s good for everyone when it does. It’s good for customers, it’s good for companies, it’s good for us because we love to change. We need to change, to evolve, to keep on top of our game and constantly do that.
It’s in our DNA to fight for every single thing you want to fight for and for every customer. So it’s knowing you want to balance things now because it is about yield. It is about profitability and growth. So you have the combination of those things you want to maintain, and so I think everyone’s going to be dealing with that in the industry as competition heats up.
In wireless you’ve seen it, and certainly you’re going to see it more and more in cable when Bell gets going against Rogers and Cogeco, but we couldn’t be happier with the spot we’re in, in western Canada from a distribution point of view. We’re comfortable that we have the right assets, that we have the right approach in wireless.
GOB: Now you mentioned competition there and Telus last week announced… wait is “Telus” a four-letter word at Shaw?
BS: Oh, no, no. I have a real appreciation for Darren (Entwistle, CEO of Telus) and everything that he does just as I do for Nadir (Mohamed, Rogers’ CEO) and his team and George (Cope, CEO of Bell) and his team. All of them do things very well. I think we look at each other and say, “Wow, you do that well, and we do this well.” Listen, I wish them luck, and we’ll see you out in the field.
GOB: And to that comment, Telus added 48,000 TV subscribers in its markets last quarter. How are you fending that off, and where do you see the growth lying ahead for Shaw?
BS: Well, a couple of things. Shaw’s been a little bit behind some of the cable companies in North American in SME – the Small Medium Enterprise business. So we see a big opportunity there for us, and we’ve actually realigned our business units to simplify the business so we can scale properly. So we see a real good opportunity there.
We certainly see a good opportunity in wireless, and it’s more data-focused. It’s certainly more personalized. It’s targeted, but it’s something we have to learn and understand.” Darren said it well. He said, “It’s a totally different business. We’re building something totally different.” And I agree with him. It is totally different, but we’re learning it.
GOB: Well, on the other end, it took Telus a long time to learn how to do TV right, too.
BS: So I appreciate that. But I see good price elasticity in western Canada compared to the east. When I look at Internet rates, they’re $8, $10 more in the east than the west so there’s some price elasticity there. And from a competitive point of view with Telus, we have a couple of new boxes, an IP box that’s kind of a mix of best of IP and best of digital cable in one box coming.
GOB: Yes, Peter mentioned that to me. He wouldn’t tell me very much about it. I was hoping you’d tell me more.
BS: (laughter) Well, it goes to up to six TVs, it’s a whole home PVR solution. And full HD functionality – streaming HD on any box at any time. So I think it goes a little bit beyond Telus in functionality. A very good guide. We have social media integrated. DLNA certified. But all those things are ready to go, but I think you have to take a natural approach. You can’t overload the customer with everything. It’s a stepped approach but we’re very excited about the product and we’ll see that in late spring.
GOB: A lot of us deal with and feel pressure from the really early adopters and try to figure out where the market’s going to go next. But I guess it can be difficult for you because you’ve got to remember that most people are not the early adopters. They’re still watching linear TV. They’re still happy with maybe their single Shaw box on one of their TVs and don’t want to change.
BS: Yes. Look at Winnipeg for example. We’ve been competing with MTS there for seven, eight years? Longer than anyone else. We learned a lot there… It helped us as we competed with Telus and that market has kind of settled down when you look at it. But we face the same thing with many customers who are totally happy with linear, no digital box or anything. Or, they like the guide, like how it scrolls. Totally comfortable.
But there’s a percentage where you have an answer because we have a lot of customers who say, “Well, what do you have next? ” It’s coming. Not good. They say, “Okay. Call me when you get it.”
GOB: And those are usually the high-end customers you don’t want to lose.
BS: That’s right. And you have to balance it… so you’re always constantly looking at those things.
GOB: Exactly. Now, to change gears, how is the integration of CanWest going?
BS: Awesome… It’s “what we can build now?” They came out of CCAA, and things have been cleaned up pretty good. Tremendous management team. I’m so pleased with the team – some people left over from Alliance Atlantis are in there. We certainly see some good opportunities in sales… cross-leveraging with the specialties, we’re looking at some other channels possibly to add in there. But it’s about what we can build and how are we going to move this content across multiple platforms? And how do we compete to be Number One? Because we’re not about Number Two.
GOB: And do you envision adding more channels?
BS: Sure. If you’re looking at Lifestyle, you’re trying to protect yourself, Look at everyone else. Corus has Oprah coming in, CTV’s going after some of the lifestyle programming. So it’s changing.
GOB: And everyone talks about Corus and Shaw Media getting together at some point, too. Same owner, JR, right?
BS: I could call you Konrad, couldn’t I? There’s that perception out there, and it’ll always be there. Nothing we can do. The family’s happy with what we’ve got and how the companies are performing. We’re good where we are.
GOB: What do you see as the future of sort of broadcasting and specialty, though? Obviously multiplatform’s the way you want to go. We all know you’ve got to be available everywhere however people want it. But what about original Canadian content, changing to a model of owning more of your own content rather than just continuing to rent the U.S. content, which has been the Canadian model for so long? Do you envision having to make more of your own content so that Global, so that Showcase, etc. is the one place you can turn to for this show or that show?
BS: We’ve certainly had internal discussions on Canadian content, somewhat long-tail also, the importance of library, where that sits, where’s the value of it. It’s something we’ve been looking at – how we produce good Canadian content that does have that library value. That’s the other thing you want because a lot of times it doesn’t have that. I think it’s also making sure that we’ve done a good job in Canada of how we move this content around and make it accessible. Look at tablets, I mean you were at the consumer electronics show.
GOB: My CE editor was. I wasn’t there. But I’ve tested some of those.
BS: Look at how that’s just an extension of the house, and we want to just move it out and have the content available anywhere. But with Canadian content, we’re all capable of continuing to put good product out there and we’re committed to doing that.
GOB: How do you visualize the company’s wireless launch next year and integrating all of that and selecting the handsets and staffing up? It’s not an easy, small job.
BS: No, it isn’t. A lot of the work as of right now is engineering and IT, so we’re building out, doing the back office systems – all that work. We’re working on our retail plans and it’s all coming together nicely. But back to the question of it is new. It’s learning for us. Is it going to be data-centric? How are we going to bundle it? How are we going to offer it? And what type of devices are we going to have? And in the AWS ecosystem, we’ll certainly look at I think, what Quebecor is offering.
GOB: And between now and your launch, too, you’re going to have the next (wireless spectrum) auction pop up, too. There are going to be rules set or perhaps an auction date set between now and when you get going on wireless in 2012, so you’ve got that to consider as well.
BS: Yeah, that’s the Cadillac, 700 MHz.
GOB: And then there’s been some thought to put to how Shaw might say “Okay, let’s just wait till 700 and launch 4G instead.”
BS: Well, we’re still building. We’re still acquiring sites. It’s not as if we’re doing one and then stopping. So you look at western Canada and the sheer size of our area and 700, certainly is preferable from a propagation and a distance point of view -it would work better.
But we’re not stopping. But for the (700 MHz) auction – what are the rules? What is the cap? We don’t know. So we might not even be in it. We’re looking to the government for support because we want to create some more competition just as Wind has to a certain degree, and so has Mobilicity.
GOB: Wind has got some legal challenges to face down now.
BS: Well, I’m sure they’re going to appeal that.
GOB: They won’t be packing up shop, that’s for sure.
BS: If they’ve invested over $1 billion, I’m sure they won’t be walking. No one does that.
GOB: So you’ve been following the usage-based billing news closely?
BS: No (laughter).
GOB: I thought it was a good move on Shaw’s part to put it out to the customers to ask. I thought that was an interesting idea that gave you another point of differentiation within the marketplace as a company that is looking out for its customers and asking for an opinion on how to do this, if at all. But where do you see it? I don’t know if you saw what I wrote. I think UBB has become kind of a poisonous issue now where you may have to walk away from the data transfer portion and sell on speed only.
BS: We’re saying “what are the other options to look at?” We had never billed one customer. We’d just started to notify and we said, “No, let’s not do that.” But when I look at 50% growth on the internet each year of the last five years and just the sheer volume of content going through here, how do we sustain this great broadband network in Canada?
All that investment and all that commitment that everyone continues to make to make sure that those speeds are very comparable on a world basis – which I think it goes to competition, productivity, and other things in Canada. So… first of all, it’s engaging the customer and saying, “What do you think for the heavy users? Should someone pay?”
And it’s education. I think in the east they might have been a little more educated than the west because us and Telus hadn’t done it. We’re in that notifying process and customers don’t know what they’re using. They’ve got Wi-Fi, the kids are online and if you’ve got tablets… there’s so much more on the wires…
When I look at how much people are using internet and video, it’s growing, and I think Internet has helped TV and will continue to help expand it. So there’s an opportunity if everything is done right and it’s really important we find what works well for the customer and educating them on how fast things have changed with how people are using the internet. We need to really get up to speed and provide awareness and education – and that in itself will help determine where we might go.
GOB: And the whole question was initially wholesale usage-based billing… but it just blew up into the whole retail aspect of it where people are saying they don’t want it anywhere at all. Personally, I run my business out of my home office. I’m online all the time, but I’m not a very heavy online video consumer. So even though I’m online all the time, hundreds and hundreds of emails coming and going, tons of surfing and I barely use 5GB a month. So there are just so many variances of how different people can use it and so much fear, so much misinformation and so many ways to express that online, so it just explodes.
BS: In prime time, 5% of our customers are using 40% of the network. So just you have to find some way to calibrate that and realize when that happens everyone else is having not such a good experience, or it potentially has that impact.
GOB: And now you’ve got to get that across to the customers in these consultations.
BS: Yes. We’ve got about two months of that. I think we’re meeting – in person – a few thousand customers and then up to 15,000, 20,000 by e-mail. We’re going to really engage them, have media there, and have government.
GOB: Are the regional managers leading it or executives?
BS: All VPs leading it so we can get close. What are they hearing? What’s going on? What do we need to do? We’re not the smartest guys. Let’s hear it. We love the collaboration because it always works. It gets the customer on side, and this is a little different, but I think that’s going to work.
GOB: Turning back to the growth question, a lot of the traditional stuff is kind of plateauing. Cable customers aren’t growing, voice is plateauing. So, where is the growth going to come from? And do you see the CanWest acquisition as a defensive ploy or an offensive ploy to expand the growth, and get more out of content?
BS: I couldn’t see ourselves now without any content rights, which is funny. Two years ago, you think, “Oh, we don’t need rights”, but I think long-term they’re valuable. So being able to get those rights, having Global come back the way it has is certainly nice and when I look at the opportunities internally to leverage across the platforms, especially being over the air, we’ve never done that.
Look at viewership. When you look at History, for example, it’s the second-rated channel now. And (carriage) rates don’t necessarily correlate to that. So there are some ways to increase your revenue and look at some things there. When we were dealing back in ’99, 2000 for WIC in that battle we said to ourselves, “Wow… if we could ever have that.” Because the branding power is where the main viewership is. It’s where all the eyeballs are. When I look at how good (Global is) in the west, their numbers are even stronger west than east. And news is powerful, so by contribution with news, we can gain audience, gain advertisers, carry the audience through the day. All those things are good opportunities.
GOB: And to promote your own products. Rogers uses City and Sportsnet and OMNI in to sell Rogers Wireless pretty heavily in Toronto.
BS: Yes. We’ve got to find the balance of paying customers and making sure it’s not a total Shaw channel. The branding is real powerful for us when you look at how it’s about getting your name out there and getting in front of people.
GOB: It’s funny to think of how different the industry could have been with different deals going different ways. Like if Shaw had gotten WIC all those years ago or if the Aspers had gotten NetStar when it was close to a deal for it. If you hadn’t been hadn’t been turned down by the Commission for The Score however long ago that was, you’d have a sports channel. Do you see anything missing in the portfolio that you want to get, like a sports channel, for example?
BS: Well, we applied, and there’s a couple of things. One is we look at sports cost. And Rogers came at us with Sportsnet, and TSN’s going to be coming soon. And as the biggest video distributor, we need the hedge. We need some leverage.
GOB: And everyone’s afraid of what TSN’s going to ask for in a new rate.
BS: Yes. And I understand costs go up, but everyone has to manage their business, and there are ways to do it. But all the deals seem to get done. At the end of the day, there’s a little fur flying and stuff, but they seem to be able to get done.
GOB: Any interest in team ownership or things like that?
BS: I did have my Canucks jersey on. Did you see it when I changed in the elevator? No, we have no interest in that. We love what we have from an asset point of view. We have lots of opportunity. We have lots of work in front of us. And that’s a big job. We’re excited about it. I think we have the team. We’ve always had a smaller team than the other guys, but I love that. I love how we’re so hands-on.
I’m in at 5:30 every morning because I love what we’re doing. I love where we’re going, and I love Telus for taking it to us because that just makes us that much better.
GOB: What’s the future for Shaw Direct? I mean it just kind of goes along, doesn’t lose or gain too many customers, just kind of stays about the same. There’s no real push to make them as big as Bell ExpressVu or Bell TV now. What’s the future for that asset?
BS: Well, we’ve always said we wanted it to be profitable, and so we’ve worked on Shaw Direct to get there. We’re launching another satellite to give us 30% more capacity in 2012 which will add about 100 HDs or somewhere in there. So we’re excited about that.
When you look at the business and look at how it performs, it gives us about 30% of our consolidated free cash flow, so we’re pretty comfortable with that. It’s a nice contributor that way. We and the board are just happy that it just ticks along that way. They do a good job. Five years in a row they had top customer service ratings because they just maintain it very well. And so with the new satellite we’re comfortable we can have some nice wins in there, small growth, and still have it as a key contributor.
GOB: I’ve gone through most of my questions except the last one. And you can answer this however you like. We all saw the stuff that was in the news about Jim when he left as CEO, and I’ve had a lot of people ask me, “What really happened? How is he doing?” I know what I’ve read. I know what I’ve been told. But what’s the truth? How is he?
BS: Well, I’ll answer it this way. Jim’s doing very well. I think one thing you can expect from this family is we talk a lot. And life has its challenges, and we all have got to be able to be there and support each other. And Jim, as I mentioned earlier, in his years as CEO and everything he’s been able to do, is pretty extraordinary. Now’s the time for him to really enjoy that. And he has had some health issues and some challenges, and I think it was important for him to look after those in doing that.
But listen, there are not too many sharper minds in the industry. And you think, “Jim’s gone,” but he’s still there. He’ll tell me “Here’s how I did this,” or “Remember this? ” or “When I approached, it was that.” Those are the conversations we’re having.
That’s really great because he’s not the guy pulling the lever so much, and he can kind of step back and take a little wider view. But I think he’s in a good spot now, and I think he’s comfortable. He’s very supportive of where the company’s going and of myself, which is very helpful… I’d never be in this position if it wasn’t for him.
Look, I’m humbled about the role I have, about what we can contribute back to the communities we serve… I’m also about making an impact in society. It’s trying to have a little more compassion and be real and just extend ourselves, reach out to that person that needs a little help or the stranger you’ve never seen or the neighbor you don’t even know.
GOB: And that’s part of that new program which includes the kids lunch program…
BS: Together is Amazing.
GOB: Yes. Blanked on the name for a second.
BS: That came from a staff member, who said, “Why don’t we? ” And I said… together is better than one. So it’s all about that contribution and backing the communities we serve. We raised 2.6 million pounds of food for the food banks in Canada, and one employee in Edmonton with his church raised 50,000 pounds. We doubled it and that’s a huge impact just by people willing to step out and us helping to support them. So we want to continue that and continue to give back because the Shaws have been so wonderfully treated and supported in Canada, and we need to do everything we can.
